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Online grocery startup Grofers is planning to launch its IPO in the next three years, reported the Press Trust of India (PTI) citing company CEO Albinder Dhindsa. The executive said that the company is pursuing profitability by consolidating its presence in the cities where it has a presence. Grofers IPO is likely only after the company’s operations become profitable.
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“We have closed FY19 with INR2,500 crore (INR25 billion) sales. At present our monthly sales have touched INR225 crore, growing at 8.5% month on month. We expect around INR5,000 crore sales in the current fiscal,” said Dhindsa who is also a co-founder of the company.
As mentioned above, the company is prioritizing profitability over scale and thus, is consolidating its presence in 12 cities where it is already present instead of expanding to newer cities.
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“We are very close to break even in Delhi and we have managed to break even in Gurgaon and Noida regions. Kolkata numbers are also on the verge of turning positive,” Dhindsa said.
The executive is hopeful of achieving break-even status in more cities by the end of the current financial year. However, it will exclude cities in western and southern India, where the company is still ramping up operations.
Grofers IPO: Private labels key to profitability
As with other online players, Grofers has identified in-house brands as pillars for achieving scale with sustainable profitability.
“Already, our own brand sales such as Mother’s Choice, Happy Home, Happy Day, and Gfresh have touched 40 percent of sales, and in the next two years, it will expand to 60 percent,” said Dhindsa while adding that about 86 percent of its users use in-house brands.
In recent years, Grofers has made an about-turn in its strategy with a shift away from hyper-local delivery model. In the latest funding round, it raised USD60 million from SoftBank in Q1 2019.